I use this blog to gather information and thoughts about invention and innovation, the subjects I've been teaching at Stanford University Continuing Studies Program since 2005.
The current course is Innovation Timing (Winter '17).
Our book "Scalable Innovation" is now available on Amazon http://www.amazon.com/Scalable-Innovation-Inventors-Entrepreneurs-Professionals/dp/1466590971/

Monday, September 12, 2011

Creativity is no longer an option.

The Economist (Sep 10, 2011) has an interesting article on the relationship between global trends and unemployment in the US. This paragraph in particular attracted my attention:

Michael Spence, another Nobel prize-winning economist, in a recent article in Foreign Affairs
agrees that technology is hitting jobs in America and other rich
countries, but argues that globalisation is the more potent factor. Some
98% of the 27m net new jobs created in America between 1990 and 2008
were in the non-tradable sector of the economy, which remains relatively
untouched by globalisation, and especially in government and health
care—the first of which, at least, seems unlikely to generate many new
jobs in the foreseeable future. At the same time, says Mr Spence, the
mix of jobs available to Americans in the tradable sector (including
manufacturing) that serves global markets is shifting rapidly, with a
growing share of the positions suitable only for skilled and educated
people.

If you look at the "Creative Crowd" chart below, you can see that mass manufacturing processes (upper left corner) simply moved overseas where pay rates for routine labor are lower. First, the creation of a highly effective shipping industry that started in the 1950s, and then the addition of inexpensive communications in the early 2000s, lead to a situation where exchanges between the right and left parts of the chart became very easy. The housing bubble of the 2000s masked the fact that in the US not being entrepreneurial and/or creative means competing with people who live on $100/month.